Thursday, July 26, 2012

Apple Will Release Mini iPad Because Of The Following Reasons

After launching Nexus 7, Apple was working hard to release mini iPad to attract their people and maintain it's production along the year. Let's read more after the jump.

There have even been talks about the smaller iPad becoming a new fashion statement as they can easily be kept inside the purses of the ladies. However, the case depends upon charts, sales projections and spreadsheets. Here is a chart which shows why the mini iPad is a missing link in the iOS portfolio. Credit goes to Ryan Jones for the revealing chart which shows Apple’s price matrix.

The chart shows the price umbrella for iPhone and iPod music player covers a range of prices, starting from $49 for iPod shuffle to $399 for the iPod Touch 64 GB. If we look at the iPhone, prices go all the way up to $849 for an unlocked iPhone 4S 64 GB. The iPhone 3GS 8GB can be bought for $0 in most markets but there is an obligatory 2-year service contract.
Coming to the iPad, the cheapest one is available for $399, which is the iPad 2 16GB Wi-Fi. Below this, there is a huge space up for grabs and Google and Amazon have taken advantage of this opportunity. Would people be loyal to the iPad when more tablets priced at $199 arrive? It’s a big question to ask! It doesn’t matter that the price advantage is still on Apple’s side, as $199 can now buy you a portable and light tablet with a smooth UI. Yes, it’s not an iPad! But it’s not garbage either. As more people turn towards the lower-priced counterparts, competitors of iPad would show it as over-priced.
For most people, $199 is the thing! They won’t care that the iPad is a premium tablet that offers extraordinary experience while Nexus 7 is for screens between seven and eight inches diagonally. Hence, the fruit company must offer an iPad to cover the lower-end of the market. However, the seven inch tablets would have the upper hand in terms of light weight and portability even if the 9.7-inch iPad is bought down to $199.
Here’s an assessment by the author of the chart in a blog post:
On a past Apple conference call, Tim Cook said “one thing we’ll make sure is that we don’t leave a price umbrella for people”. What’s that? A price umbrella is when a company with dominant market share maintains high prices, leaving an opening for new competitors to enter at lower price points.
In the case of the iPad, the price umbrella until recently was at $499. Someone could enter that market at lower prices and exhibit classic disruption to push them out from the bottom up.